Overriding Consumer Preferences with Energy Regulations

48 Pages Posted: 18 Jul 2012 Last revised: 27 Nov 2012

Ted Gayer

Brookings Institution

W. Kip Viscusi

Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

Date Written: July 17, 2012

Abstract

This paper examines the economic justification for recent U.S. energy regulations proposed or enacted by the U.S. Department of Energy, the U.S. Department of Transportation, and the U.S. Environmental Protection Agency. The case studies include mileage requirements for motor vehicles and energy-efficiency standards for clothes dryers, room air conditioners, and light bulbs. The main findings are that the standards have a negligible effect on greenhouse gases and the preponderance of the estimated benefits stems from private benefits to consumers, based on the regulators' presumption of consumer irrationality.

Keywords: energy regulations, cost-benefit analysis, behavioral economics, consumer choice, climate policy, energy efficiency standards

JEL Classification: Q4, Q48, Q5, Q54

Suggested Citation

Gayer, Ted and Viscusi, W. Kip, Overriding Consumer Preferences with Energy Regulations (July 17, 2012). Vanderbilt Law and Economics Research Paper No. 12-24; PERC Research Paper No. 12/13. Available at SSRN: https://ssrn.com/abstract=2111450 or http://dx.doi.org/10.2139/ssrn.2111450

Ted Gayer (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

W. Kip Viscusi

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Vanderbilt University - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States

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